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So far, 2022 has been a year of great political and economic instability. It is possible to say that all countries have had to position themselves and promote policies to contain damage in the face of recent events.
The highlight goes to the war between Russia and Ukraine, which moves the whole world directly or indirectly, and the continuity of the Covid-19 pandemic. The fear of economic recession increases, and rising interest rates and inflation diminishes the confidence of citizens and investors around the world every day.
In this context, the inevitable has happened. Oil production has been quite fickle and the price of a barrel varies with each new event of worldwide consequences.
Resource availability and barrel price
First, the war headed by Russia promptly shook the oil supply. The country is the largest oil producer in the world, and the difficulties of dialogue between Western countries have made this trade very difficult.
The war has caused constant supply disruptions, added to the recent inability to produce in the Middle East. Norway and Ecuador, other strong traders of the product, also showed instability.
The supply crisis has shown that the expected result is gradually approaching: rising prices per barrel. This is a result of both the decrease in supply and the gradual increase in inflation and interest rates, which also stems from multiple recent events.
The issue is no different in the world’s stock exchanges. Virtually all stock indices have been devaluing every day, reflecting the instability of economies and lack of control of the situation by governments.
In general, the prices of barrels of oil have risen due to the decrease in supply and the rise in prices on the stock exchanges.
China, in turn, faces a new wave of contamination by the Coronavirus, and has resumed strict policies on its territory. For this reason, it has not been very active in international politics, as it faces its own political and social impasses.
Shaken confidence
The several successive problems that have been occurring in the political, social and economic scenarios and the global health crisis resulted in a main effect that concerns the sentiment of the world population: the lack of confidence in the recovery in the short term.
The whole world has been waiting anxiously for more than two years for the economic recovery resulting from the pandemic and the authorization for the return of normal activities, which so far has not happened. On the contrary, 2022 arrived with a series of events that actually created more obstacles to stability.
It is known that one of the main factors for investment concerns the investor’s feeling of confidence that that activity or product will develop satisfactorily. The successive breaks in expectations in this regard have made investors, consumers and the population in general create a certain resistance to new ventures and very high stakes in the economy.
What is observed in the economic scenario today is the perception of the crisis at a global level. The richest countries avoid talking about recession for now, but the slowdown in growth and the increase in unemployment and poverty rates are latent.
Contrary to this scenario, many new business models and the operationalization of society emerge, as a response to this moment of crisis that forced people to seek alternatives for survival.
The home office model and the online presence of companies and even state departments that used to have a plastered and inefficient structure show that the changes are not absolutely negative.
The world is undoubtedly going through a moment of crisis, instability and lack of confidence in the economy and in short-term growth. However, all States are actively positioning themselves at the moment of crisis and the strategy currently is to proceed with timid steps, without allowing the resurgence or the outbreak of economic crises around the world.